I just got back from the 2011 Craft Brewers Conference in San Francisco. (Yes, had a great time; thanks for asking. Well, except for the part about the no airplane available on Sunday morning, which forced me to stay an extra day spent almost entirely in an airport hotel…..)
While I was gone, Anheuser-Busch InBev announced it had purchased a controlling share of Goose Island Brewing in Chicago and would soon buy the remaining shares. (ABIB already owned a share of the company that holds the minority share.
And the hand wringing has begun. (I’d post links, but there are too many. Just roam around the beerblogosphere and you’ll find plenty.)
But: why? Why the hand wringing? And why is anyone surprised? People, were ya not payin’ attention here at the ol’ blogarooney?
I told you three years ago that you could expect to see moves like this. The only surprising fact here is that there haven’t been more of such moves.
Yes, ABIB and MillerCoors will continue to grab onto craft breweries (how many of them depends entirely on who is inclined to sell. Many craft brewers prefer to keep it small/local/beautiful/whatever). And why not? The people running those companies are not stupid. They understand that a small but affluent segment of beer drinkers is willing to pay a premium for, ya know, premimum beers. Like Goose Island.
And for a beer maker, premium is where it’s at. (Premium beers take up the same amount of space in the warehouse and on the truck, but they bringer a higher profit per bottle than “regular” beers.)
So. Of course ABIB is interested. What will the company do with its new acquisition? I haven’t a clue, although it has two obvious options.
One, it can leave the beermakers alone to keep making what they make (premium beers). Or two, it can tell the beermakers to cease and desist and start making Budweiser knock-offs.
Smart money says they opt for Door Number One. Why? Because ABIB isn’t looking for Bud knockoffs. It’s hunting for premium beers. (Remember those: the ones that yield more profit per bottle than Bud?) Why screw with the goose that’s laying the golden egg? (No pun intended until I realized that, heee heeeee!, I’d just made a pun!) (I’m not so good at puns.)
Leaving Goose Island alone to do what it does best is a win-win for ABIB: It earns profit and it can start loading GI products on its trucks and selling them in a larger territory than was available to GI when it was on its own.
So. Time will tell, but — I’ve been a pretty good prognosticator up to now.